Sometimes they are operating quite literally from a back bedroom. Usually they have an office, but not necessarily any paid staff. Nonetheless, their results are invariably striking.

Smaller charities are the essence of the voluntary sector. Year after year, I and my fellow judges of the Guardian Charity Awards are astounded – and genuinely humbled – by what organisations are achieving on a shoestring.

As the National Council for Voluntary Organisations (NCVO) points out, the public and media perception of charities is generally shaped by the work and profile of an elite of fewer than 500 associations with annual income each exceeding £10m. Together, they account for almost half the sector's total income.

Yet these large operations make up as little as 0.3% of the total number of active registered charities. Conversely, according to the NCVO, more than half of the total have income of less than £10,000 each and as many as 85% fall below £100,000. Even without taking account of unregistered groups – estimates of which range as high as 600,000 – the face of charity in the UK is overwhelmingly a small one.

The Guardian awards seek to acknowledge this, casting a spotlight on the work of small and medium-sized registered charities across the UK and giving a leg-up to five of the very best.

Typically, winners will be meeting a local "social welfare" need (interpreted very broadly as helping people) in effective and innovative ways. One of the successful 2011 entrants, the Nightstop Devon project, arranges overnight accommodation for homeless young people with local volunteer families. Or winners may be addressing an overlooked need nationally: Antenatal Results and Choices, which won in 2007, supports people who receive a worrying screening result or when a fetal anomaly is diagnosed in their unborn baby.

The judges are particularly pleased to be able to honour charities that tackle vital but unglamorous challenges. Community Accountancy Self Help (Cash), another of last year's winners, trains volunteers with other small charities in the mysteries of book-keeping and other basic financial skills.

With an estimated 4,000 small charities closing every year, such skills are vital. But there is no shortage of new charities coming forward to take their places, if with different aims and objectives as times change. Thus the voluntary sector is constantly renewing itself.

One piece of good news for smaller charities is that they may not be suffering quite as badly as their bigger counterparts from cuts in central and local government spending. State funding is received by only 38% of charities with income of between £10,000 and £100,000, and by just 8% of those with income below £10,000 so the hacking back of grants and contracts is less of an issue for them.

On the other hand, smaller charities are much more reliant on income from individuals. Organisations existing on less than £100,000 get between half and two-thirds of that from membership charges and personal donations. Inevitably, such funding will be hit by the impact of the continuing recession on people's pockets.